London — European front-month power prices climbed in the week to Nov. 27 on a colder, calmer weather outlook, erasing losses sustained through November as mild and at times windy weather saw average prices fall well below last year's levels.
In Germany, December base jumped 30% on week to trade above Eur40/MWh Nov. 27, while French December power was up 20% on week trading above Eur47/MWh for the first time since October, EEX data showed.
In November, French nuclear ramped up to peaks of 47 GW, boosting exports with domestic demand some 10% lower year on year. However, the revised weather outlook for early December alongside bullish sentiment for coal and carbon boosted prices.
European coal hit $60/mt, up 10% since the start of November with only a handful of closing prices above that level for the front-year contract since the coronavirus pandemic started.
EU CO2 prices rose above Eur28/mt as supply was set to tighten over coming weeks due to an unexpected delay to the start of auctions in 2021.
TTF front-month gas traded closed just above Eur14/MWh Nov. 26, little changed over the fortnight, but up 10% week-on-week after the mild weather and improved supply pushed the contract below Eur13/MWh by close Nov. 20, S&P Global Platts data show. Gas prices rose further Nov. 27 amid strike action in Norway.
German gas gains
German day-ahead power was on track to average Eur38/MWh in November, down 8% YoY. However, week 49 starting Nov. 30 jumped almost 50% in the week to Nov. 27, trading above Eur49/MWh with coal, carbon gains and cold, calm weather all bullish factors.
The German Cal 21 contract also rose, trading above Eur41/MWh for the first time since early October.
Lockdown restrictions were expected to tighten in December as German coronavirus infections inched higher, although German power demand has been less impacted by restrictions than elsewhere due to its high share of industrial demand.
Wind once again topped the monthly power mix ahead of lignite, generating 11 TWh and 9 TWh respectively month-to-date, TSO data aggregated by Fraunhofer ISE show.
Wind averaged below 2 GW Nov. 27 compared to a 16 GW month to date average, but was forecast to rebound over coming days, spotrenewables.com data show.
Nuclear supply was also set to improve with the Gundremmingen C reactor scheduled to return for Nov. 30, while gas generation was on track for a 22-month high, averaging around 8 GW for November as rising coal and carbon prices hit coal-fired generation margins.
French exports up
France's nuclear fleet availability has continued to improve, November's 43 GW average generation up 7% on year. EDF delayed planned returns for Flamanville 2 and Golfech 1 to Dec. 5 and 6 tightening supply for week 49 with temperatures forecast to dip 2 C below norms set to boost peak demand to 78 GW Dec. 2, system data showed.
November spot prices settled around Eur40/MWh, down 10% on year, even if rising above Eur60/MWh Nov. 26 as a 24-hour strike briefly affected supply.
Power demand in the month to date had averaged 55 GW, down 6 GW or 10% YoY, RTE data showed. French power exports rose strongly to average 6.7 GW November to date versus 2 GW in November 2019.
Nuclear availability is now above both 2018 and 2019, with any anxiety shifting to February after RTE warned of possible blackout risks in case of extended severe cold spells.
GB wind down
A drastic fall in wind output saw the UK spot power contract climb to GBP68/MWh for delivery Nov. 26, its highest since 2018's March beast from the east episode, and as wind output was forecast to fall below 1 GW during most peak hours.
Profit-margins for 50% efficient gas-fired plants were at the highest since 2017 at GBP25.02/MWh for Nov. 26 with hourly prices spiking to GBP313/MWh for 5-6 pm UK time.
Platts data show NBP day-ahead gas up only slightly to 40 p/th for Nov. 26. "Prices are going to get more volatile like that... It's all down to wind not turning up," a trader said.
UK month-ahead power contracts remained at a premium to the Continent with active flows seen for the first time on the IFA2 interconnector after it entered its commissioning phase on Nov. 16.
Around 0.9 TWh of net exports had flowed from the UK to France via IFA 1 in November, data from Platts Analytics showed.
Italy tracks France
Spanish spot prices in November were slightly above where the front-month contract settled, averaging Eur41.03/MWh to Nov. 27 due to lower renewables output.
November adjusted demand fell around 3% on year, compared to a 1.6% drop in October as lockdown measures continued in an effort to limit the spread of the coronavirus.
The December contract rallied in the week to Nov. 27, but revised forecasts for higher wind and rainfall early December reduced gains in Spain.
"[Prices] are more stable, the forecasts are showing an increase in wind and water for the start of December, it even fell to Eur42/MWh, but then recovered [with the other markets]," a Spanish trader said.
Italian spot power averaged Eur48.51/MWh to Nov. 28, the highest since September and slightly above November 2019, GME data showed. Strong gas prices and firm power demand lifted gas-for-power demand.
Italy's December contract tracked French power higher, settling at Eur49.15/MWh Nov. 26 up over Eur5 from Nov 20, EEX data showed.
"Primarily it has been the change in weather forecast brought German and French [December contract] to rise, Italy followed but to a lesser extent," an Italian trader said.